IRS scandal a symptom of centralizing political power

by Robert Maynard

Many Americans are shocked by the scandal of the IRS targeting political critics of the government.  They shouldn’t be, as that is the kind of politics you get when you continue to centralize political power in the hands of the central government.  What we are witnessing is Lord Acton’s old adage that “power corrupts, and absolute power corrupts absolutely.”  This is particularly so with political power, because the state is the only institution in our society based on the justified use of force.  An old Christian Science article captured our founders’ thoughts on this matter with this supposed quote from George Washington: “Government is not reason, it is not eloquence, it is force; like fire, a troublesome servant and a fearful master. Never for a moment should it be left to irresponsible action.”   This article from the Independent Institute points out that this IRS targeting of government critics was “As Predictable as Politics”  Here is an excerpt:

President Obama expressed shock that government agencies would ever operate systematically to punish the enemies or reward the friends of sitting presidents.

But students of Public Choice, that discipline that uses economic logic to explain political action, were not surprised at all. And why should they be? Public Choice studies tell us that all government action is best seen as political. All of it. Special-interest influence seeps through in unusual but systematic ways. And it doesn’t take written orders from the top or telephone calls from the Oval Office to make these things happen. People in politics understand the game; they know which side of the bread receives butter.

On the IRS specifically, Jim Couch and colleagues at the University of North Alabama published research in 1999 that focused on statistical treatment of IRS audit activities as conditioned by political variables. The 1995 audit data were part of annual summaries for IRS districts reported in the Transactional Records Access Clearinghouse (TRAC) at Syracuse University.

The Couch statistical model explained the frequency of those audits across states. Their explanatory variable included whether or not a state senator sat on the IRS senate oversight committee or a representative sat on the house oversight group, the share of votes cast for President Clinton in 1992, and other variables that are thought to be positively associated with audit activity, such as higher levels of earned income tax credits as proxied by the state poverty rate and gambling income.

Simply put, special interests are increasingly using politics to get what they want because that is where all the power has been concentrated.